DEUTSCHE BANK LEVERAGED FINANCE CONFERENCE 2017 - Jason...

ACOUSTICSFINISHING SEATINGCOMPONENTS

DEUTSCHE BANK LEVERAGED FINANCE CONFERENCE 2017

Brian Kobylinski, Chief Executive Officer

Chad Paris, Chief Financial Officer

John Hengel, Vice President, Finance

2

DISCLAIMER

FORWARD LOOKING STATEMENTS

This presentation includes “forward looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation

Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “anticipate,” “believe,” “expect,” “estimate,” “plan,” “outlook,”

and “project” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. Such forward looking

statements with respect to revenues, earnings, financial information, performance, strategies, prospects and other aspects of the businesses of Jason

Industries, Inc. (the “Company”) are based on current expectations that are subject to risks and uncertainties. A number of factors could cause actual results

or outcomes to differ materially from those indicated by such forward looking statements.

The forward‐looking statements contained in this presentation are based on assumptions that we have made in light of our industry experience and our

perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. The

forward-looking statements are not guarantees of performance or results, as they involve risks, uncertainties (some of which are beyond our control) and

assumptions. Although we believe that these forward‐looking statements are based on reasonable assumptions, many factors could affect our actual results

and cause them to differ materially from those anticipated in the forward-looking statements.

More information on potential factors that could affect the Company’s financial condition and operating results is included in “Risk Factors” and “Management’s

Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K filed on March 2, 2017,

and in the Company’s other filings with the Securities and Exchange Commission. Any forward‐looking statement made by the Company in this presentation

speaks only as of the date on which we make it. We undertake no obligation to publicly update any forward‐looking statement, whether as a result of new

information, future developments or otherwise, except as may be required by law.

NON-GAAP AND OTHER COMPANY INFORMATION

Included in this presentation are certain non-GAAP financial measures designed to complement the financial information presented in accordance with

generally accepted accounting principles in the United States of America because management believes such measures are useful to investors. Because the

Company’s calculations of these measures may differ from similar measures used by other companies, you should be careful when comparing the Company’s

non-GAAP financial measures to those of other companies. A reconciliation of non-GAAP financial measures to GAAP financial measures is included in

an appendix to this presentation.

JASON INDUSTRIES - DB LEVERAGED FINANCE CONFERENCE 2017 //// PAGE

3

JASON INVESTMENT HIGHLIGHTS


STRONG FUNDAMENTAL BUSINESS

• Diversified end-market exposure

• Leader in target markets with significant scale over direct competitors

• Global manufacturing footprint serving longstanding customer base

• Free cash flow generation

POSITIONING FOR MARGIN EXPANSION AND GROWTH

• Global Cost Reduction And Margin Expansion Program Generating $25M In Annual Cost Savings

• Focusing On The Core, Exiting And Divesting Noncore Businesses, Product Lines, And Customers

To Drive Margin Expansion

• Pricing And Operational Improvement Opportunities Leading To Margin Expansion And Earnings

Growth

• Commercial Activity Driving Diversification And Future Growth

• Increasing Intimacy With End-users To Improve Product Portfolio Positioning

4

JASON BUSINESS OVERVIEW

KEY COMPANY FACTS

Employees ~4,300

Headquarters Milwaukee, WI

2016 Revenue $705.5 million

2016 Adjusted EBITDA $64.2 million

Founded 1985

Listed on NASDAQ (JASN, JASNW) July 2014

Manufacturing 33 Sites in 12 Countries

GEOGRAPHIC FOOTPRINT

FINANCIAL PROFILE

$680.8 $702.5 $708.4 $705.5

$625 - $640

$400

$500

$600

$700

$800

ʼ13 ʼ14 ʼ15 ʼ16 ʼ17E

$79.8 $77.8 $81.2

$64.2 $63 - $66

11.7%11.1% 11.5%

9.1%10.0%

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

ʼ13 ʼ14 ʼ15 ʼ16 ʼ17E

NET SALES*($ in Millions)

ADJUSTED EBITDA*($ in Millions)


5

SEGMENT KEY HIGHLIGHTS BRANDS 2016 REVENUE

% OF JASON

2016 REVENUE

2016 ADJUSTED

EBITDA %

• Used for surface preparation,

cutting, finishing, polishing, and

sealing

• World’s largest producer of

industrial brushes, buffs and buffing

compounds

• Only business supplying global

marketplace

• 85% consumable, high recurring

revenue

$197M 12%

• Products used in filter products,

smart utility meters, railcars, and

other industrial equipment

• Industry-leading engineering,

coupled with customized

components and individualized

solutions

$98M 15%

SEGMENT OVERVIEW

FINISHING


28%

COMPONENTS

86%14%

6

SEGMENT KEY HIGHLIGHTS BRANDS 2016 REVENUE

% OF JASON

2016 REVENUE

2016 ADJUSTED

EBITDA %

• Leading commercial and industrial

seat manufacturer

• Designs and manufactures a broad

spectrum of seating systems for

multiple vehicle platforms, including

heavyweight motorcycles, turf care,

heavy industry, and powersports

• Differentiated patents and IP filings

$161M 10%

• North America’s largest producer of

acoustical fiber insulation

• Have product on 70% of the light

vehicle platforms in North America

• Innovative solutions provider with

brand recognition

$250M 11%

SEGMENT OVERVIEW

23%

23%

SEATING


ACOUSTICS

35%

7

ACTIONS PROGRESS UPDATE


• FINISHING EXITED BRAZIL

• FACILITY SALE LEASEBACK

o Executed Libertyville Site With $5.6M Of Net Proceeds

• ACOUSTICS SALE OF EUROPEAN OPERATIONS

o Exits Approximately $30M Of Non-Core Revenue, Dilutive Margins

o Sale Completed in 3Q17, Sale Price Of $10M

o Cash Proceeds Of $6.9M, Net Of Debt Payoff And Transaction Costs

• COMPONENTS FACILITY CLOSURE

o Consolidating Two Plants In Libertyville, IL

o Annual Cost Savings Of $1.3M, ~$1.5M Of Restructuring Costs

• FINISHING FACILITY CLOSURE

o Consolidating Richmond, VA Plant Into Existing Richmond, IN Facility

o Annual Cost Savings Of $0.6M, ~$1.7M Of Restructuring Costs

o Completed Facility Sale in 3Q17, $2.1M of Net Proceeds Funding

Restructuring

COMPLETE

COMPLETE

IN PROCESS / ON TRACK 4Q17

COMPLETE

Monetizing Non-Core Assets And Reducing Cost Structure

IN PROCESS / ON TRACK 4Q17

8

LEAN ACTIONS

• FACILITY CLEANUPo Implementing LEAN Tools

o Freeing Up Existing Space

o Improving Manufacturing Flow

• OFFSITE FACILITY CLOSURESo Jackson, MI Warehouse (Seating)

o Burgwald, Germany Warehouse

(Finishing)

• AUTOMATION PROJECTSo Finishing Core Production Lines

o Components Flow Lines

o Acoustics Assembly Testing


9

TARGETED GROWTH INITIATIVES


Finishing

• Geography

Middle East, APAC, Mexico

• Vertical Markets

Oil & Gas, Heavy Fab, Automotive, Process

• New Product Development

Core Product Refreshment

True, Differentiated Products/Systems

Seating

• Understand The End-User Better Than

The OEM Does

• Platform Placement

• Aftermarket Support

• Globalization Of Customers

Components

• Geography

Mexico, Southern US

• Market Diversification

Safety Grating, Security Fencing,

Architectural

Acoustics

• Build Bridge From Old To New

Platforms

• Diversifying Customer Base

• Continued Market Share Gains

Wheel Liner, Underbody Panels

10

FINISHING GROWTH ACTIVITY

Dronco Integration Into Osborn Geography

New Product DevelopmentVertical Markets


11

COST REDUCTION AND

MARGIN EXPANSION PROGRAM

• SG&A RESTRUCTURING

o Actions Exceeded Target

• OPERATIONS OPTIMIZATION

o Supply Chain Project

— Target Impacted By Lower Volumes

o Footprint Rationalization

— Buffalo Grove Facility Closed In 4Q16

— Libertyville Facility Consolidation 4Q17

— Richmond, VA Facility Closure in 4Q17

— Targeting Additional Footprint Actions


SELF HELP PROGRAMS2017

EBITDA

Impact

Annual

Savings

Achieved

Annual Savings

Target Over 3 yrs

$3M $11M $10M

$8M $11M $15M

OPTIMIZE PRODUCT LINES, CUSTOMERS & LOCATIONS

• SKU REDUCTION IN FINISHING AND SEATING

• EXITING LOW MARGIN BUSINESS AND CUSTOMERS

• EXITED FINISHING BRAZIL IN 1Q17

• SALE OF EUROPEAN ACOUSTICS OPERATIONS IN 3Q17

PORTFOLIO OPTIMIZATION

$11M $22M $25M

12

FINANCIAL POSITION


LIQUIDITY & DEBT FREE CASH FLOW

Improved Leverage On Debt Reduction & Free Cash Flow Generation

(in millions)

$400

$410

$420

$430

$440

$450

$0

$20

$40

$60

$80

$100

$120

2Q16 3Q16 4Q16 1Q17 2Q17

D

e

b

t

L

i

q

u

i

d

i

t

y

Cash Revolver Availability Debt

Net Debt To Adj. EBITDA 5.7X As Of 2Q17

*See Appendix for calculation of Net Debt to Adjusted EBITDA.

(in millions)

• Reducing Debt and Leverage, and Improving Liquidity

• Sale Leaseback Net Proceeds - $5.6M

• Acoustics Europe Sale Net Proceeds - $6.9M

• Finishing Facility Sale Net Proceeds - $2.1M

• 2nd Lien Debt Repurchases of $20.0M for $16.8M in 2017

-$2

$0

$2

$4

$6

$8

$10

$12

$14

$16

1Q 2Q 2Q YTD

2016 2017

• Improving Operations Drive Free Cash Flow

• Free Cash Flow Generation - $14.2M YTD

13

DEBT SUMMARY


DEBT STRUCTURE

Long-Term Maturities With Covenant-Lite Terms

(in millions)

$300

$102

$29

2Q17

First Lien

Term Loan

Second Lien

Term Loan

Non-U.S. Debt

2021

2022

Maturity

50% Variable

50% Fixed

Effective Interest

Rate – 7.7%

COVENANTS

• Springing First Lien Leverage Ratio

Covenant Only Applicable When

≥$10m Borrowings On U.S. Revolver

At Quarter End

• Zero Borrowings Outstanding U.S.

Revolver, Strong Liquidity With No

Expectation To Use Revolver

• First Lien Leverage Ratio of 3.89x As

Of 2Q17

• Covenant (if applicable):

• 2Q17 4.75x

• 4Q17 4.50x

*Note the consolidated First lien net leverage ratio under the Company’s senior secured credit facilities was 3.89x as of June 30, 2017, and excludes second lien term loan

borrowings from net debt. See Form 10-Q for further discussion of the Company’s senior secured credit facilities.

14

PATH FORWARD


•Enhancing Plant-Level Management Talent

•Improving Operations Through LEAN

•Commercial Activity Driving Diversification & Future Growth

Investments In Operations

•SG&A Restructuring

•Operations Optimization

•Supply Chain

•Footprint Rationalization

•Portfolio Optimization – Non-core geographic and product line exits

Global Cost Reduction And Margin

Expansion Program

•Maintenance Capital

•Cost Reduction Programs

•Investments in Automation

•Growth Projects

Capital Expenditures

•Free Cash Flow Growth And Working Capital Reduction

•Net Debt to Adjusted EBITDA Leverage Target of ~3.0x Debt Reduction

15

CLOSING COMMENTS


2017 EXECUTION

• Execution On Restructuring Actions – Improved Project Execution

• Improving Operations Through LEAN – Profit Growth Despite Challenging Markets

• Free Cash Flow And Working Capital Reduction – Driving Leverage Reduction

• Leverage Reduction – One Half Turn Reduction

POSITIONING FOR MARGIN EXPANSION AND GROWTH

• Global Cost Reduction And Margin Expansion Program Generating $25M In Annual Cost Savings

• Focusing On The Core, Exiting And Divesting Noncore Businesses, Product Lines, And Customers

To Drive Margin Expansion

• Pricing And Operational Improvement Opportunities Leading To Margin Expansion And Earnings

Growth

• Commercial Activity Driving Diversification And Future Growth

• Increasing Intimacy With End-users To Improve Product Portfolio Positioning

APPENDIX


17

ADDRESSABLE MARKET(1)

$8 BILLIONWORLDWIDE

EUROPE 57%

U.S. 35%

MEXICO 4%

ROW 4%

INDUSTRIAL BRUSHES 44%

INDUSTRIAL BUFFS

& COMPOUNDS 22%

ABRASIVES 24%

OTHER 10%

FINISHING OVERVIEW

OVERVIEW

• Products used for finishing, preparation, metal removal, sealing, shielding and polishing

• Manufacturing, distribution and sales facilities in 14 countries

• 85% of revenue from consumables

• #1 manufacturer of industrial brushes, buffs and compounds in the world

• More than 30,000 customers worldwide; only business supplying global marketplace

FINISHING’S WELL-RECOGNIZED BRANDS MAINTAIN EXCEPTIONAL

WORLDWIDE REPUTATIONS FOR QUALITY AND MARKET

LEADERSHIP


Europe

55%

2016

REVENUE BY

END PRODUCT

2016

REVENUE BY

GEOGRAPHY

$180 $188 $191 $197

10%

14% 14%

12%

$0

$40

$80

$120

$160

$200

ʼ13 ʼ14 ʼ15 ʼ16

FINANCIAL PROFILE

Adjusted EBITDA %

Revenue ($ in millions)

(1) Management estimates

18

U.S. 100%

RAIL 32%

FILTRATION 29%

ELECTRIC METERS 18%

INDUSTRIAL 11%

OTHER 10%

COMPONENTS OVERVIEW

OVERVIEW

• North America’s top independent manufacturer of rail safety products, expanded

and perforated metal products and electric meter bases

• Components offers customized metal components and individualized

engineered solutions

• Product categories are united by a common culture of maintaining

industry-leading engineering capabilities

JASON COMPONENTS’ INNOVATIVE DESIGN AND MANUFACTURING

CAPABILITIES HAVE ALLOWED IT TO SUSTAIN SUCCESSFUL,

LONG-TERM CUSTOMER RELATIONSHIPS


2016

REVENUE BY

GEOGRAPHY

2016

REVENUE BY

END PRODUCT

$131 $124 $122

$98

17%

14%

17%

15%

$0

$30

$60

$90

$120

$150

ʼ13 ʼ14 ʼ15 ʼ16

FINANCIAL PROFILE

Adjusted EBITDA %



$750 MILLIONIN NORTH AMERICA

$2 BILLIONWORLDWIDE//


19


$1.5 BILLIONWORLDWIDE

SEATING OVERVIEW

OVERVIEW

• Milsco brand maintains the #1 position in the global static seating market

• Primary product segments include heavyweight motorcycles, turf care, heavy

industry and powersports

• Positioned for future growth opportunities in global heavy construction and

agriculture markets


SEATING’S LONG-STANDING OEM CUSTOMERS REPRESENT SOME

OF THE WORLD’S BEST-KNOWN BRANDS, INCLUDING

HARLEY-DAVIDSON MOTOR COMPANY, JOHN DEERE, MTD, POLARIS

AND HUSQVARNA

United

States

95%


$165 $172 $177 $161

15% 15%

11%10%

$0

$50

$100

$150

$200

ʼ13 ʼ14 ʼ15 ʼ16

FINANCIAL PROFILE

Adjusted EBITDA %


2016

REVENUE BY

GEOGRAPHY

31%2016

REVENUE BY

END PRODUCT

U.S. 94%

EUROPE 6%

TURF EQUIPMENT 35%

MOTORCYCLE OEM 18%

MOTORCYCLE

AFTERMARKET 10%

CONSTRUCTION &

AGRICULTURE 17%

MATERIAL HANDLING 12%

UTILITY VEHICLES 8%

20

OVERVIEW

• Jason’s Acoustics segment is North America’s largest producer of acoustical fiber

insulation and a leading producer of automotive fiber-based molded and die-cut products

• Products are used in approximately 70% of light vehicles in North America today,

including the majority of top platforms

• Jason’s Acoustics segment product content per vehicle has increased by 48%

since 2010

• Future organic growth will be driven by innovative new products, including lightweight-

fiber automotive underbodies

ACOUSTICS HAS DEVELOPED EXTENSIVE DESIGN AND

MANUFACTURING EXPERTISE TO PROVIDE CUSTOM ACOUSTICAL

SOLUTIONS FOR EACH VEHICLE PLATFORM IT SERVES


$2.5 BILLIONIN NORTH AMERICA

U.S. 70%

MEXICO 17%

EUROPE 13%

TRUNK SYSTEMS 25%

DIE CUT INSULATION 22%

MOLDED INSULATION 21%

IP CLOSEOUTS 10%

CARPET SYSTEMS 8%

ENGINE 3%

WHEEL LINERS 2%

OTHER 9%

ACOUSTICS OVERVIEW


2016

REVENUE BY

GEOGRAPHY

2016

REVENUE BY

END PRODUCT

$204 $219 $218

$250

11%

9%

13%

11%

$0

$50

$100

$150

$200

$250

ʼ13 ʼ14 ʼ15 ʼ16

FINANCIAL PROFILE

Adjusted EBITDA %


$12 BILLIONWORLDWIDE//


Wheelhouse/Cowl

Under Bonnet

Hush Panels

Dashboard Insulators(Interior & Exterior)

Door Panel Insulation

Underbody

Floor/CarpetUnderlayment

LuggageCompartment

21

NET DEBT TO ADJUSTED EBITDA

June 30, 2017

(in millions)

Current and long-term debt* $ 419.8

Add: Debt discounts and deferred financing costs 10.9

Less: Cash and cash equivalents* (55.0)

Net Debt $ 375.7

Adjusted EBITDA

3Q16 16.5

4Q16 10.5

1Q17 18.6

2Q17 20.6

TTM Adjusted EBITDA 66.2

Net Debt to Adjusted EBITDA 5.7x

*Includes cash ($0.03M) and debt ($2.1M) associated with the Acoustics Europe

sale classified as assets and liabilities held-for-sale, respectively



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